FEFI · FOREIGNEXCHA

NRO ACCOUNT SCHEME

Chapter notes, video classes, MCQ practice tests and quick-revision one-liners for Foreign Exchange Facilities for Individuals — Foreign Exchange Facilities for Individuals.

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Q

What does NRO stand for in the context of bank accounts?

A

NRO stands for Non-Resident Ordinary, a rupee-denominated account held by non-resident Indians to manage income earned in India.

Q

Can an NRO account be converted to an NRE account upon re-emigration of the account holder?

A

No, NRO funds are not freely repatriable like NRE funds.

Q

Who is eligible to open an NRO account in India?

A

Any person resident outside India, including NRIs and PIOs (Persons of Indian Origin), is eligible to open an NRO account.

Q

What is the maximum repatriation allowed from NRO account per financial year for current income?

A

Current income like rent, pension is fully repatriable.

Q

In which currency is an NRO account maintained?

A

An NRO account is maintained in Indian Rupees (INR) and cannot be held in foreign currency.

Q

Which form must be submitted to repatriate capital funds from an NRO account exceeding the standard limit?

A

Form 15CA and 15CB along with CA certificate are required.

Q

Can a returning Indian convert their existing resident savings account to an NRO account?

A

No — a person leaving India to become an NRI must convert their existing resident savings or current account to an NRO account upon becoming a non-resident.

Q

Can NRO account funds be used to make investments in Indian mutual funds?

A

Yes, NRO funds can be invested in Indian mutual funds.

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